Teams that offer their free agents salary arbitration get Draft picks in return if the player signs elsewhere, and the number of picks is based on the player's rating. According to a statistical study by Elias Sports Bureau, free agents are rated either A or B.

A team that loses a Type A free agent gets two compensatory Draft picks: the signing team's first-round pick if it is below the first 15 picks in the Draft, as those are protected, and a supplemental pick between the first and second rounds. If the signing team has a pick in the first 15 slots, the team that loses the free agent will get the signing team's second-round selection and the sandwich pick.

Compensation for losing Type B free agents is a supplemental pick.

Teams that do not offer salary arbitration to free agents who sign elsewhere get nothing in return.

The upside for the team is the additional Draft pick or two, but they are also on the hook for at least a one-year contract at market value, which will likely be a bump from what the player earned the previous season, if an offer is accepted.

Players have a deadline of 11:59 p.m. ET on Sunday to accept arbitration, but can still negotiate with their former teams, even if they decline the offer. If the player accepts arbitration, the two sides can negotiate a deal, but will go before an arbitrator if no agreement is reached.

It was a bit of a surprise move by the Yankees, who were expected to offer arbitration to either Abreu or Pettitte. The club remains open to the idea of bringing the players back for 2009, and Abreu and Pettitte, both Type A, would like to return.

"By doing [this], we chose to go a different direction, not offer the arbitration, and we'll still stay engaged with the entire free-agent market, including those two players," Yankees general manager Brian Cashman said.

The Yankees are looking to improve their starting rotation and one target is Sabathia. The Brewers included the left-handed ace in their arbitration offers along with Sheets and Brian Shouse, while declining an offer to Eric Gagne.

Sabathia and Sheets are both Type A free agents, while Shouse, a left-handed reliever, is Type B. As the top free-agent pitcher in this offseason's class, Sabathia is unlikely to accept arbitration, but Sheets and Shouse are less clear.

"Your goal is to try to re-sign your guys, and [extending arbitration] gives you a chance to re-sign your guys to one-year deals," said Brewers GM Doug Melvin. "I think all of the players are still looking to get multi-year deals when they are free agents, and by us offering arbitration, it shows we still have some interest in the players.

Three other clubs with top-tier free agents who also took the step of ensuring at least compensation for loss were the Dodgers, Angels and Blue Jays.

The Dodgers had extended to Ramirez last month a two-year deal worth a reported $45 million before withdrawing the offer. By offering Ramirez arbitration along with Lowe and third baseman Casey Blake, the Dodgers stand to net as many as five Draft picks if all sign elsewhere. Blake is a Type B.

"You go into it knowing there's a chance the player will accept, with the mind-set that one, two, three will say, 'You know what? I'll come back on a one-year deal,'" said Dodgers GM Ned Colletti. "We'd be happy to have any of them back for one year."

The Blue Jays opted to get something in return in the event they lose Type A free agent Burnett, while the Angels could seriously restock their farm system with the extension of salary arbitration to four players.

Top on that list is Teixeira, who was the highest-rated free agent by Elias this year. But the Angels also hedged their bets with Type A's Rodriguez and Darren Oliver, and Type B Jon Garland. Unrated free agent Juan Rivera was not offered arbitration.

One omission was Anderson, a Type B who had an $11 million option for 2009 and has been with the organization since 1990.

Another long-tenured veteran could be set adrift, as the Padres made the expected move of declining salary arbitration to Hoffman, a Type-A.

There has been no dialogue since the team pulled it's one-year, $4 million offer from the table last month, but Monday's move means the Padres can still negotiate with Hoffman. It also means they won't be bound by the market rate for an upcoming season that will likely see them trim significantly from the payroll.

In addition to offering arbitration to Type A Varitek, the Red Sox extended the offer to right-handed starter Paul Byrd, a Type B free agent. Varitek isn't expected to accept the offer.

Renteria, a Type A, is being courted by the Giants, but Detroit was not interested in the possibility of a compensatory Draft pick when the flip side could mean bringing the shortstop back for at least the $9 million he made in 2008.

"You go into it knowing there's a chance the player will accept, with the mind-set that one, two, three will say, 'You know what? I'll come back on a one-year deal."

"The big thing for us is we want to remain flexible and also look at what we feel might be the best way to improve this team," Cardinals GM John Mozeliak said. "The one thing that I was cautious about was, if we decide to offer arbitration, there is a chance they might have accepted."

The Orioles declined to offer arbitration to any of their unrated free agents -- Kevin Millar, Jay Payton, Juan Castro and Alex Cintron -- but are considered serious bidders for Teixeira.

The World Series champion Phillies did not offer arbitration to Pat Burrell, Jamie Moyer, Tom Gordon and Rudy Seanez. General manager Ruben Amaro Jr. has said that the Phillies would like to bring back Moyer.

The White Sox announced on Tuesday that it had extended an offer to Cabrera.

For second baseman Mark Grudzielanek, the salary arbitration offer by the Royals was nice, but the veteran said it's nearly 100 percent that he won't accept.

"Not that I wouldn't want to come back there. It's not that I had a problem with anybody there. It just comes down to my situation and my career where it's at right now," Grudzielanek said. "I'm going to be a little spoiled here and try to go to somebody who has a little bit more opportunity to push to the [World] Series."

Earlier on Monday, Hampton signed a contract with Houston that is pending a physical examination. The Astros announced on Tuesday that they did not extend arbitration offers to Wolf, Brocail and Mark Loretta.

The Nationals did not offer arbitration to unrated free agents Aaron Boone and left-hander Odalis Perez, while the A's declined arbitration to Alan Embree, Keith Foulke, Frank Thomas and Emil Brown. Embree and Thomas are Type B's while Brown and Foulke are unranked.

The Mariners offered arbitration to Type A Raul Ibanez, but not to unrated utility players Willie Bloomquist and Miguel Cairo, while Arizona included relievers Juan Cruz and Brandon Lyon with Hudson in their arbitration offers, but not Tony Clark and David Eckstein.

Left without arbitration offers by the Marlins were Type-B free agents Luis Gonzalez, Arthur Rhodes and Paul Lo Duca, and unrated free agent Mark Hendrickson, while the Giants declined arbitration to Rich Aurilia and Omar Vizquel.

The Reds offered salary arbitration to reliever David Weathers. There was no word if the Reds offered arbitration to any of their eight remaining free agents, including utility player Jerry Hairston Jr. and reliever Mike Lincoln.

Mike Scarr is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.